Bristlemoon Capital, a global equity firm, published its “Bristlemoon Global Fund” investor letter for the first quarter of 2026. The Bristlemoon Global Fund returned -25.5 percent in the March 2026 quarter, with a return of -3.4 percent for March 2026, net of fees. A copy of the letter is available to download here. This was the Fund’s most serious drawdown since its inception, caused not by declining profits but by a sharp and rapid repricing by investors. The letter described the weak performance, how the company addressed it with a composite/conviction position sizing framework, and adjustments following the events of the Iran war. The first quarter of 2026 saw a sharp sell-off of software companies, mainly due to fears that AI would impact SaaS companies. During this dislocation, the company increased its holdings of high-quality assets at lower prices. Long-term earnings growth remains key and the company believes its holdings are well positioned to grow earnings attractively over time. Also, check out the Fund’s top five holdings to learn your best picks in 2026.
In its Q1 2026 investor letter, Bristlemoon Global Fund highlighted AppLovin Corporation (NASDAQ:APP). AppLovin Corporation (NASDAQ:APP) is a mobile technology company that specializes in developing software-based platforms for advertisers to improve the marketing and monetization of their content. On May 5, 2026, AppLovin Corporation (NASDAQ:APP) closed at $478.11 per share. AppLovin Corporation (NASDAQ:APP)’s monthly performance was 22.22% and its shares gained 57.55% in the last 52 weeks. AppLovin Corporation (NASDAQ:APP) has a market capitalization of $160.77 billion.
Bristlemoon Global Fund stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q1 2026 investor letter:
“AppLovin Corporation (NASDAQ:APP), the Fund’s largest position, fell almost -41% in the March quarter. This reduction in stock was a significant impact to the Fund’s performance during the quarter. Like many of the Fund’s other holdings, future earnings expectations for APP have steadily risen, but the share price has plummeted due to unfounded fears of AI disruption. In other words, the entire APP share price drop was driven by a drop in the earnings multiple.
It’s worth recounting some of APP’s share price movements during the quarter to highlight the strange trading activity we saw. For example, APP declined -30% in January 2026. This included a -17% sell-off in a single day following Google’s announcement of Project Genie, a generative AI tool that allows users to create playable 3D worlds via text messages. This price drop seemed irrational to us, given that this development is more likely to be positive for APP. In a world where AI lowers the barriers to creating gaming content, we would likely see an explosion of new mobile games. And in a world flooded with games, content becomes commoditized and distribution (that is, presenting the game to people who want to play it and spend money) becomes a scarce asset…” (Click here to read the full text)
